If the outcome of a long-term contract can be measured reliably, the preferred accounting method under both IFRS and US GAAP is: C . the percentage-of-completion method.

Q: Of what significance is (a) an unguaranteed and (b) a guaranteed residual value in the lessor's…

A: The amount to be recovered by the lessor is the same whether the residual value is guaranteed or…

Q: the core principle of the new accounting standard (IFRS 16) is that an entity shall recognise assets…

A: Lease is an agreement between two parties lessor and lessee. Lessor provides its asset for use to…

Q: FASB Statement No. 133 requires that all derivative financial instruments be reported at their: a.…

A: Derivatives are a form of financial instruments which changes their value with change in interest…

Q: Based on the requirements and guidance of IFRS 15, one of the following is not considered part of…

A: Under the contract costing, there is an agreement made between two parties in respect of performing…

Q: Which of the following statements regarding the recognition of expenses related to long-term…

A: Recognition of expenses in accounting refers to the process of recording and reporting the costs…

Q: Match the following challenges in revenue recognition with their corresponding aspec A. Determining…

A: Accounting Concepts -The phrase "accounting concepts" refers to fundamental guidelines,…

Q: Statement 1: Liabilities are present obligations that represent both legal and constructive…

A: The liability can be legal or constructive. Current liabilities are those which are payable within…

Q: We use dual model for lease accounting due to the accounting concept of: A) Conservatism. B)…

A: Dual model for lease accounting due to following accounting concept.

Q: What rate is used when computing the present value of the new liability arising from modification of…

A: Present value represents the worth of money is more than in the future for the same amount.

Q: Discuss the primary differences between U.S. GAAP and IFRS with respect to leases.

A:

Q: The fair value of a liability is defined as: a. the appraised value of the liability. b. the price…

A: The fair value of a liability is defined as the amount that would be paid when transferring a…

Q: What are the measurement issues in the IFRS16 Leases standards.? a)Which basis of measurement is…

A: In the year 2016, The International Accounting Standards Board (IASB) published IFRS 16 - LEASES.…

Q: When a contract includes an option to buy additional goods or services, when does that option give…

A: Contract: Contract is a written document that creates legal agreement between the parties for buying…

Q: hich of the following statement about expected vesting period agrees with IFRS 2?

A:

Q: Is it possible that a finance lease under IFRS be classified as an operating lease under U.S. GAAP?…

A: International Financial Reporting Standards (IFRS) refers to the set of common rules which are used…

Q: Where can we obtain reliable guidelines on IFRS lease accounting?

A: It is dealing with where can we obtain reliable guidelines on IFRS lease accounting

Q: Describe the effect on the lessee of a “bargain purchase option” on accounting for a finance lease…

A: Lease agreement refers to an agreement in which a contract is made to get the asset on lease. The…

Q: In an equity-settled transaction, if the total compensation changes in the subsequent period, the…

A: Under share based payment, if during subsequent period, total compensation changes then that change…

Q: Q7a. Clearly explain why the issue of lease capitalization has been controversial.

A: Q7a. Lease capitalization : The two main categories of leases are operating lease and finance lease.…

Q: agreement at method e-of-completion method ent method

A: The revenue recognition method that is applied to long term contracts is percentage of completion…

Q: Given the following 1. Gross Premium 2. Commission 3. Claims 4. Outstanding Claims and 5. Incurred…

A: Accounting - The process of keeping track of all financial transactions pertaining to a business is…

Q: Explain the difference in lessor income statement presentation for a sales-type versus operating…

A: Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of…

Q: What are the two subsequent measurement for financial asset? Who are part of the contract of lease

A: The financial assets is the kind of liquid assets that gets its value from the right of the contract…

Q: Which of the following accounts would not appear on the income statement of a lessee in connection…

A: A finance lease indicates the agreement between the lessor and lessee where the former provide the…

Q: It is that portion of the lease payments that is not fixed in amount but is based on a factor other…

A: Contingent rent is considered as a rental payment that varies with the future amount which is not…

Q: What are the two basic methods of accounting for longtermconstruction contracts? Indicate the…

A:

Q: Which of the following statements is true about initial direct costs? A. Initial direct costs of a…

A: According to the Generally Accepted Accounting Principle, initial direct cost is defined as the…

Q: David Mendez Under the percentage-of-completion method, how should the balances of progress billings…

A: Progress Billings as income: Progress billings represent amounts billed to customers for work…

Q: Explain the difference in lessee income statement and balance sheet presentation for a finance…

A: Lease agreement refers to an agreement in which a contract is made to get the asset on lease. The…

Q: How does a seller allocate a transaction price to a contract’s performance obligations?

A: Transaction price: Transaction price is the amount of consideration that is estimated by the company…

Q: opinion: Should lease payments be a current liability included in the acid-test ratio? why

A: Acid-test ratio: The financial ratio which evaluates the ability of a company to pay off the instant…

Q: Payments on an operating lease will appear:  A. In the profit and loss account as an expense B. In…

A: Lease agreement is a type of agreement between two parties, in which one party provides its assets…

Q: What two methods are identified in the Codification as appropriate in accounting for long-term…

A: Long term Construction Contract Construction contract are in different type in accordance with need…

Q: Which of the following is not a condition in the determination of when a valid contract exists: O…

A: In accordance with IFRS 15, a contract with a customer is said to exists only if the following…

Q: Access the FASB Accounting Standards Codification at the FASB website ( www.fasb.org ). Determine…

A:

Q: When it is probable that total contract costs will exceed total contract revenue, how shall it be…

A: Contract account is prepared when the work to be done take substantial time to make (generally more…

Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.